Frederick v. John Wood Co.

• Decision Date: 15 June 1962
• Docket Number: No. 38536,38536
• Citation: 116 N.W.2d 88,263 Minn. 101
• Parties: Sidney FREDERICK, Plaintiff, v. JOHN WOOD COMPANY et al., Defendants. Roy A. SHELGREN, Third-Party Plaintiff, Respondent, v. GENERAL ACCIDENT FIRE AND LIFE ASSURANCE CORPORATION, Ltd., et al., Third-PartyDefendants, General Accident Fire and Life Assurance Corporation, Ltd., Appellant.
• Court: Minnesota Supreme Court

Page 88

116 N.W.2d 88

263 Minn. 101

Sidney FREDERICK, Plaintiff, v. JOHN WOOD COMPANY et al., Defendants.

Roy A. SHELGREN, Third-Party Plaintiff, Respondent,

v.

GENERAL ACCIDENT FIRE AND LIFE ASSURANCE CORPORATION, Ltd.,

et al., Third-PartyDefendants,

General Accident Fire and Life Assurance Corporation, Ltd.,

Appellant.

No. 38536.

Supreme Court of Minnesota.

June 15, 1962.

Rehearing Denied July 30, 1962.

Syllabus by the Court

1. Where an insured under a policy of liability insurance has knowledge of the occurrence of an accident but has reasonable grounds for believing that he is not liable and fails to notify his insurer until a demand is made upon him, the insurer is not absolved of the duty of defending the insured.

2. Where the record indicates that remarks of counsel in his final argument to the jury are invited by opposing counsel, it ordinarily will be left to the trial court's discretion to determine whether there should be a new trial.

3. The verdict in this case is liberal but not so excessive as to require a new trial.

Mahoney & Mahoney, Harry H. Peterson, Minneapolis, for appellant.

Cummins, Cummins & Gislason, David W. Nord, St. Paul, for respondent.

KNUTSON, Chief Justice.

This is an appeal from a judgment entered pursuant to a verdict of a jury.

The facts may be briefly stated. Defendant John Wood Company is a large manufacturing company located in the city of St. Paul. In 1956 it decided to construct an elevated bridge connecting the second floors of two of its buildings. It let a contract to defendant Roy A. Shelgren to construct the bridge proper, which consisted of an enclosed ramp, or tunnel, as it is sometimes referred to in the record. The Wood company contracted with others to install a conveyor within the tunnel and to do other work after the main construction had been completed by Shelgren. The contracts with Shelgren and others who were to perform various parts of the job included a provision that each contractor assumed the liability for accidents or injuries involving his own employees.

After the main tunnel or bridge had been completed by Shelgren, on June 11, 1956, plaintiff Sidney Frederick, an employee of Harley Christenson who had subcontracted to do the installation of the conveyor belt within the tunnel, accidentally fell through the floor of the tunnel to the ground about 20 feet below and was quite seriously injured. A very short time after the accident, Shelgren arrived at the scene of the construction and learned that a man had fallen through the bridge and had been hurt. After making some investigation, he concluded that he was not at all liable for the injury. For almost 2 years, no one claimed that Shelgren was in any way liable. On April 16, 1958, a suit was commenced by Frederick against the Wood company. Shelgren was not named as a defendant. The Wood company, through its insurer, interposed an answer in that action. For almost a year thereafter, Shelgren heard nothing about it to indicate that he was involved in any way. About a year after this action had been commenced, and almost 3 years after the happening of the accident, an attorney for Wood's insurer notified Shelgren that he was expected to defend the action. Shelgren immediately answered that Frederick was not his employee and that he was at a loss to understand how he could be held liable. This letter was never answered, and as far as Shelgren was concerned he thought the matter was at an end. That action was voluntarily dismissed by plaintiff on December 9, 1959.

On January 12, 1960, a second action was commenced by Frederick, this time against both the Wood company and Shelgren. Shelgren immediately forwarded this summons and complaint to his insurer, appellant in this action. Appellant denied liability on the ground that it had not been notified in accordance with its contract. The insurance contract contains these provisions:

'Defense, Settlement, Supplementary Payments With respect to such insurance as is afforded by this policy, the company shall:

'(a) defend any suit against the insured alleging such injury, sickness, disease or destruction and seeking damages on account thereof, even if such suit is groundless, false or fraudulent; but the company may make such investigation, negotiation and settlement of any claim or suit as it deems expedient 'Notice of Accident or Occurrence In the event of an accident or occurrence, written notice shall be given by or on behalf of the insured to the company or any of its authorized agents as soon as practicable. Such notice shall contain particulars sufficient to identify the insured and also reasonably obtainable information respecting the time, place and circumstances of the accident or occurrence, the names and addresses of the injured and of available witnesses.

'Notice of Claim or Suit If claim is made or suit is brought against the insured, the insured shall immediately forward to the company every demand, notice, summons or other process received by him or his representative.'

After denial of liability by appellant, Shelgren undertook the defense of the action himself, and, after trial, the court found that there was no basis for liability on the part of Shelgren and a verdict was directed in his favor. Appellant was brought into the action as a third-party defendant and its liability to...